Investor Letter October 2007

Dear Investor:

This is our latest real estate update to keep you abreast of the ongoing dynamic growth in the Victor Valley.

Inland Empire job market explodes – area snares No. 3 spot in national study among 200 large U.S. metropolitan areas, per Michael Rappaport, Staff Writer, San Bernardino Sun, September 26, 2007. “This study shows that this area is an economic powerhouse and will remain one for the next several decades. Best of all, we haven’t even reached the mature phase of our growth.” This study shows that the area has the ability to overcome the high costs of doing business in California.

Victor Valley growing despite housing slump – After passing the 100,000 population mark in May, Victorville added 2,000 more people as of August 31. Hesperia as of May 1 was 85,876 – growing by 5,658 people in five months. In Apple Valley, the town estimates that as of the end of July, the town had 68,940 people. The numbers show that despite the nationwide housing slump, people are still moving to the High Desert.

Apple Valley – The Fountains at Quail Ridge will be a Tuscan village theme using stone, cobble and rich colors to feature the newest outdoor center. The Fountains at Quail Ridge will feature restaurants, shops and offices. The 346,460-square-foot site will link shopping areas and office buildings with landscaped walkways enhancing the outdoor dining areas and serve as a meeting and gathering place.

Victorville – An enclave of restaurants, stores, offices and dwellings is taking shape just west of Interstate 15 and north of City Hall. With the opening of Midtown Spectrum, mixed use in Victorville is no longer just an idea. The complex will have office suites juxtaposed with restaurants and retail. It is a complex of 36,000 square feet of office space coupled with 20,000 square feet of retail and food service. Luxury apartments are just down the road, while a 426-unit residential complex has already been submitted to the city. And a grouping of 55 single-family homes is just across Roy Rogers Drive from Home Depot. The city envisions more than one city center with multiple centers, where those who live nearby can live, work and place … and spend less time in their cars.

Desert Sky Plaza, Victorville, announces a major expansion of about 480,000 square feet. The first phase of the existing power center is already leased by more than 70 percent. The second phase of the project will feature other major retailers and several stand-alone stores. Another 120,000 square feet of space is in the pipeline which will be anchored by a major supermarket. There are several locational advantages to leasing the retail space at Desert Sky Plaza which includes high-traffic counts, proximity to the freeway and surrounding demographics.


Rubbermaid is ready to open in Victorville. It will be the first company to run a warehouse comprising of 407,000-square-feet and employing 85 employees, at the Southern California Logistics Airport Business Park. The warehouse will be bringing in goods from Asia and redistributing them through the southwest and the rest of the country. Victorville is building a rail spur to connect the BNSF line to the complex. The entire park will be known as Global Access.

Hesperia – High Desert Gateway Center breaks ground. The 360,000-square-foot-center, located at Interstate 15 and Main Street, is the first big-box retailer in the city since 1988. It is anticipated that the High Desert Gateway Center will spur development by the freeway. A SuperTarget will anchor the center and the city is expecting that $16 million will be invested in the project, with 250 construction jobs and more than 1,000 permanent jobs created. The center’s developer, Lewis Retail Centers, expects to announce several large tenants, including pet supplies, office supplies and apparel retailers within about two months. City officials have said the High Desert Gateway is the beginning of large-scale commercial development along Hesperia’s freeway corridor.

Las Vegas-based developer Carl Ross, owner of Safari Properties, has bought several parcels in the freeway corridor, including the land where there were hopes to build a casino, along with Richard Lewis. Ross said he was close to signing a “big deal” on 46 acres where the casino was planned, but would not reveal any details.

Hesperia to get another big retail center – High Desert Crossings to break ground in 3rd quarter of 2008 and will feature about 192,500 square feet of space.

And, Hesperia plans mixed-use project near new City Hall – project would be first in the Victor Valley to combine housing, retail. The project which is located on 25 acres surrounding the new City Hall and library complex is currently on the drawing board pending finalization of the master plan. Hesperia is trying to create a vibrant downtown environment by increasing the population of workers in the office component to support the retail and restaurants.

Whether you are a builder, developer, or investor, Victor Valley provides a great opportunity for profitable real estate ventures. With jobs, people relocate and need housing – not all will be able to buy their own homes. Now is the time to seriously consider purchasing rental property.

I would greatly appreciate the opportunity in helping you select the right rental properties and also, in selecting any vacant land that you may need to strengthen your investment income and further your retirement dreams.

Sincerely,


Pamela Suzanne Johnson, REALTOR®
Cell - (760) 646-3631